Chu’s lead example is Lever Style, Inc., a Chinese maker of shirts and blouses that has cut its Chinese workforce by a third, and moved production of clothing for Japan’s Uniqlo chain to Vietnam, were workers earn half of what Chinese employees now expect. Lever Style is also looking to India as a source of lower-cost products.

The global race to find the cheapest places for low skilled manufacturing has a dark side, illuminated again by the deadly factory collapse in Dhaka, Bangladesh . Owners of that clothing factory faced pressure to keep production going, despite warning signs, because clients had threatened to shift their orders to rival factories in India.

Chinese manufacturers, like their Western rivals, will be tempted to look to the opening of Myanmar, or Burma, as a fresh frontier for cheap labor to hold down production costs. More in the full post. Read More »